Better than expected earnings are driving 3Com Corporation (NASDAQ: COMS) stock today. The lagging networking and router company posted earnings last night of 11 cents non-GAAP EPS on revenue of $342.6 million. First Call estimates were 6 cents EPS on $337.12 million in revenue. The results were above the already raised targets.

3Coms's prior raised guidance from August had been for revenues to come in a range of $335 million to $340 million ($10 million higher than before) with earnings per share of $0.06 to $0.08. 3Com generated $39.3 million in cash from operations. The company's cash and cash equivalents as of August 29 were $541.4 million.

Even more interesting is that on a GAAP basis when benefits of a legal patent settlement are included, 3Com would have actually earned 20 cents EPS. The other translated results were a 7% rise in revenues because of strong sales in Asia lasting longer than 3Com had expected. It also removed 33% from operating expenses.

It is far too soon to say that a turnaround is underway here. But these results are better than even most skeptics would have assumed. The company's small size now with a market capitalization of under $1 billion means that these results will also not translate to strength in the larger competitors.

Shares are up over 5% at $2.21 this morning on active trading volume, but with so few analysts following it and with the stock being relegated to a "cult stock" or a "has been" stock, the verdict is still a long ways off on this one.